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Study group forecasts 345 000 t refined copper surplus in '09

TORONTO (miningweekly.com) – The global market for refined copper will likely show a surplus of at least 345 000 t of copper this year, compared with an estimated 250 000 t surplus in 2008, the International Copper Study Group (ICSG) said on Tuesday.

For 2010, the group has forecast a surplus of 400 000 t.

However, the group cautioned that the supply-demand balance remains uncertain, because of its vulnerability to changes in the global economic climate.

“ICSG recognises that the current global economic crisis has created a large degree of uncertainty in the global market, and its impacts on both the supply and demand for refined copper are not fully known.

The study group has revised its production forecast downwards since October, to reflect cutbacks and closures at operating mines and refineries, and delays or cancellations of projects.

World copper mine production in 2009 is now expected to rise by 3,8%, or 590 000 t, compared with 2008, to 16-million tons.

In October, the study group forecast production growth of 11% year-on-year.

Capacity utilisation is expected to decline to about 81%, the lowest level since 1989.

In 2010, mine production may increase 7,5%, to 17,2-million tons, owing to new developments and “a reduction in operational constraints”, the ICSG said.

World production of refined copper (adjusted for feed shortages and production disruptions) is projected to decrease to 17,6-million tons in 2009, a decline of about 700 000 t, or 3,7%, compared with 2008 levels.

Capacity utilisation is expected to improve in 2010 and refined production is projected to increase by 6,7% to 18,8-million tons, an increase of about 1,2-million tons compared with 2009.DEMAND SUFFERS

The current global economic crisis has “significantly” reduced world refined copper usage, the ICSG said.

The body expects world refined usage to decline by at least 4,3% in 2009, mostly owing to an average decline of 14% in three major markets - the US, the European Union and Japan.

Growth in China of about 3% is expected to be lower than that in previous years.

Based on prospects for a recovery in the world economy, and anticipated expansion of the semis industry in China and the Gulf region, indications are that usage in 2010 could improve by 6,4% - an increase of only 1,8% above 2008 levels.